Pub group JD Wetherspoon reported a drop in profits before tax for the half-year to 27 January 2019.
Despite a 7.1% increase in revenue to £889.4m, the group’s profits before tax fell by 18.9% to £50.3m from £62m the year before. It closed the period with an operating profit of £63.5m which signified a £14.2% decrease from £74m in the same period last year.
The company said its drop in profits was due to higher labour costs which rose by £33m – a result of JD Wetherspoon promising to increase staff wages as UK salaries saw a rise. Other costs included repairs, utilities, interest and depreciation which saw increases of £3.7m, £2.5m, £3.3m and £2.4m respectively.
Like-for-like bar sales rose by 5.9% food by 7.1% and fruit/slot machines by 5.7%. Like-for-like hotel room sales increased by 0.3%. Bar sales were 60.5% of total sales, food 35.9%, fruit/slot machines 2.5% and rooms 1.1%.
Tim Martin, chairman, said: “In the six weeks to 10 March 2019, like-for-like sales increased by 9.6%, helped by excellent weather this year and snow last year, and total sales increased by 10.9%. As previously indicated, costs in the second half of the year will be higher than those of the same period last year. The company anticipates an unchanged trading outcome for the current financial year.”